57,771 job opportunities created
by FAYYADH JAAFAR/pic by TMR
Malaysia has attracted a total of RM123.3 billion worth of approved investments in the first six months of 2022 (1H22) creating 57,771 job opportunities in the country.
According to Malaysian Investment Development Authority (Mida), the approved investments were in the manufacturing, services and primary sectors, involving 1,714 projects.
It reported that 70.9% (RM87.4 billion) worth of approved investments were from foreign direct investments (FDIs), while 29.1% (RM35.9 billion) from domestic direct investments (DDIs).
The manufacturing sector contributed the largest share of FDIs at RM47.7 billion, while the services sector contributed the largest share of DDIs at RM72.9 billion.
The majority of FDI came from China at RM48.6 billion. This was followed by Germany (RM9 billion), Singapore (RM6 billion), Brunei (RM5.1 billion) and the Netherlands (RM4.1 billion).
For projects approved by states, five major states contributed RM103.5 billion (83.9%) of the total investments approved from January to June 2022.
In this period, the services sector assumed a significant role in driving the country’s economic recovery, accounting for 63.3% of total approved investments of RM78 billion.
According to Mida, the stellar performance for the services sector exceeded expectations for January to June 2022, an increase of 48.8% from the achievement attained in the same period in 2021.
The manufacturing sector also contributed significantly to the country’s economic recovery, with investments totalling RM43.1 billion, or 34.9% of the total approved investments for the period of January to June 2022.
This is followed by the primary sector at RM2.2 billion, or 1.8%.
International Trade and Industry Minister Datuk Seri Mohd Azmin Ali credited the strong recovery of Malaysia’s economy to the strong commitment of the government and its agencies toward making Malaysia a competitive investment destination.
“Malaysia is on the right trajectory to secure more high-quality, high-impact, and capital-intensive projects, with the services sector being the key growth driver for the economy and the largest contributor of approved investments for 1H22.
“In maintaining the momentum, MITI (Ministry of International Trade and Industry) will continue to strengthen the country’s competitiveness by developing economic complexity, nurturing a strong industrial ecosystem with innovation intensity, enhancing inclusivity through the creation of high-income jobs, and promoting opportunities to participate in the regional and global supply chains,” he said in a statement today.
Driven by the National Investment Aspirations, Azmin said MITI will intensify its focus on sectors such as digital economy, electrical and electronics (E&E), pharmaceutical, chemical and aerospace with significant economic potential and sustainable long-term growth.
The government has lined up strategic and focused trade and investment missions targeted to capture investments in high technology, innovation and research-driven industries that will complement and further strengthen the Malaysian industrial ecosystem.
In regards to the service sector, Mida said digitalisation has been embraced by many businesses to enhance their productivity and efficiency.
It has also enabled them to expand their customer base and improve their product offerings.
New services have materialised through the invention of the Internet of Things, artificial intelligence, and the cloud network, which has redefined the service sector’s importance in Malaysia’s economy.
With the establishment of the Digital Investment Office to promote investment in Malaysia’s digital economy, Mida aims to facilitate investments that embody high-value, sustainability and technologies.
For this period, the services sector accounted for the largest share of the total approved investments, amounting to RM78 billion from 1,351 projects, which contributed to the growth of the country’s economy.
This is a significant increase as compared to the RM52.4 billion of investments approved for the sector in the same period last year, with 22,569 new jobs expected to be created.
The government has approved RM50.4 billion worth of FDI in the services sector for the first half of 2022 (1H22).
The information and communications sub-sector recorded the highest level of investment with three data centre projects totalling RM51.1 billion (95.2%).
Other top performing sub-sectors were real estate, utilities, hotels and tourism.
Five sub-sectors showed positive development in terms of percentage increment of approved investments, namely information and communications, with an increase of 1,300%.
This was followed by other services with an increase of 153.4%, hotels and tourism (15.3%), distributive trade (14.3%) and utilities (7.2%).
Meanwhile, the manufacturing sector accounted for RM43.1 billion (34.9%) of the total approved investments in various economic sectors compared to RM75.8 billion for the same period in 2021.
The approval of a megaproject was cited as the reason for the high total of approved investments in the manufacturing sector for 1H21.
Of the total approved investments in 1H22 for the manufacturing sector, FDI amounted to RM35.5 billion (82.4%), while domestic investments contributed to the remaining RM7.6 billion (17.6%).
From the RM43.1 billion approved investments in the manufacturing sector, investments for expansion/diversification projects showed positive development with an increase of 31.9%, totaling RM26 billion for the 1H22 compared to the same period in 2021.
The remaining RM17.1 billion was recorded from new projects.
In terms of top-performing industries for this period, E&E products lead the manufacturing sector (RM19.4 billion), followed by petroleum products (including petrochemicals) (RM5.1 billion); non-metallic mineral products (RM4.8 billion); scientific and measuring equipment (RM3.6 billion); fabricated metal products (RM2.8 billion); chemical and chemical products (RM1.5 billion); machinery and equipment (RM1.4 billion); as well as food manufacturing (RM1.1 billion).
These industries made up RM39.5 billion (91.6%) of total approved investments in this sector.
A total of 35,032 potential job opportunities are expected to be created in the manufacturing sector, where they will require 1,745 (5%) managerial positions and 4,122 (11.8%) professional/technical and supervisory roles, such as engineers in the fields of E&E, mechanical, chemical and other disciplines, reflecting the higher value chain transition of the manufacturing sector.
The approved manufacturing projects will also require 7,491 (21.4%) skilled craftsmen, such as plant maintenance supervisors, tools and die makers, machinists, IT personnel, quality controllers, electricians and welders.
Projects approved in Malaysia’s manufacturing sector for 1H22 include the ams Osram Group (SIX:AMS), which is investing in research, development and state-of-the-art manufacturing capabilities in its wholly owned legal entity Osram Opto Semiconductors (M) Sdn Bhd at the Kulim Hi-Tech Park.
Petroventure Energy Sdn Bhd will also be manufacturing petroleum products in Sabah, including gasoline, kerosene, benzene, liquefied petroleum gas, acrylic, sulphur, slurry, fuel oil and diesel.
This project will help Sabah’s economy to thrive as the products from the refinery will create a new supply chain that will benefit many businesses.
The primary sector recorded a total of RM2.2 billion approved investments (1.8%) of the total approved investments in the various economic sectors for the period of January to June 2022 compared to RM6.5 billion approved investments for the same period in 2021.
FDI dominated the primary sector with investments valued at RM1.5 billion (68.2%), while the remaining RM0.7 billion (31.8%) was contributed from domestic sources.
Two sub-sectors showed significant growth, namely the agricultural sub-sector and the plantation and commodities sub-sector.
The agricultural sub-sector amounted to RM184.7 million in total approved investments, which is a 1,500% increment from the previous RM11.5 million investments for the same period in 2021.
Meanwhile, the plantation and commodities subsector recorded RM109.1 million of approved investments, an increase of 36.6% from the previous RM79.8 million of investments for the same period in 2021.
“Malaysia remains steadfast in its fundamentals as the pre-eminent preferred investment destination in the region and is set to catapult the nation to stage its most robust recovery as we enter the stage of endemicity.
“As we forge ahead on the path of economic revitalisation supported by ongoing policy reforms and accelerated digitalisation, the government remains committed to prioritising the needs of our people and businesses,” Azmin said.
As of August 2022, there are 276 projects with proposed investments of RM25.1 billion within Mida’s pipeline; 198 projects are from the services sector (RM13.7 billion) while 78 projects are from the manufacturing sector (RM11.4 billion).
Meanwhile, according to the 2021 Global Services Location Index by global consulting firm Kearney, Malaysia is the world’s third most competitive Global Business Services location, trailing behind India and China.
This biannual index tracks the contours of the global landscape across 60 countries in four major categories, namely financial attractiveness, people skills and availability, business environment, and digital resonance.